As more homeowners—especially baby boomers and retirees—consider downsizing, one of the most common questions we hear is:
“Are smaller homes cheaper to insure?”
In most cases, the answer is yes. But while smaller homes tend to cost less to insure, the full story depends on several important factors.
At Eugene C. Yates Insurance Agency, we’ve been helping Sacramento residents protect their homes since 1946. Here’s what you need to know about how the size of your home affects your insurance premium.
🏠 Why Smaller Homes Usually Cost Less to Insure
1. Lower Replacement Cost
Home insurance is primarily based on the cost to rebuild your home, not its market value. A smaller home usually requires:
- Less building material
- Fewer labor hours
- Smaller foundation and roof
All of this reduces the amount of dwelling coverage you need—and that directly lowers your premium.
2. Less Personal Property
Smaller spaces typically mean fewer possessions. If you’ve downsized your furniture, electronics, and personal items, you may need less personal property coverage, which also brings down the cost.
3. Fewer Liability Risks
A smaller home usually has a smaller yard, fewer stairs, and simpler layouts—reducing the likelihood of guests getting injured on your property. This can result in a lower liability premium.
🚨 When a Smaller Home Might Not Be Cheaper to Insure
Even if your home is small, other factors could increase your insurance cost:
- Age of the home – Older homes may have outdated wiring or plumbing, which raises risk.
- Location – Homes in wildfire, flood, or earthquake zones (especially in parts of California) may have higher premiums.
- Construction materials – If the home has custom finishes or specialty materials, the cost to rebuild can still be high.
- Insurance history – Past claims, coverage gaps, or credit history can influence your rate.
💡 Ways to Lower Homeowners Insurance (Big or Small)
No matter your home’s size, here are some proven ways to save:
- Bundle policies (home + auto = discount)
- Increase your deductible (only if it fits your budget)
- Install home security and smoke detectors
- Ask about senior or retiree discounts
- Work with an independent agency (like ours!) to compare quotes from top carriers
🏡 Thinking About Downsizing? Don’t Forget to Review Your Coverage
If you’re moving into a smaller home, don’t just carry over your old policy. There’s a good chance you’re overinsured—and overpaying. A custom homeowners policy based on your actual replacement cost and belongings can save you hundreds each year.
At Eugene C. Yates Insurance Agency, we help Sacramento-area homeowners—and especially seniors—get the right protection at the best rate.
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Eugene C. Yates Insurance Agency
Trusted. Local. Affordable. Proudly Serving Sacramento Since 1946.